Stablecoins have quietly become one of the most profitable businesses in financial services. While banks juggle loan books, compliance burdens, and regulatory capital requirements, stablecoin issuers like Tether and Circle are running some of the leanest,
most lucrative operations in history. In 2024, stablecoins processed over $27.6 trillion in transactions—outpacing Visa and Mastercard by 7.7%—while keeping their transaction costs near zero.
But what makes them so profitable? And why are they so widely adopted—particularly in Africa, where stablecoins are increasingly being used for payments, remittances, and currency hedging? Several factors drive this volume. Stablecoins enable instant, low-cost
transfers across borders, offering a compelling alternative to card networks and banks for moving money. Unlike the ~2–3% merchant fees typical for Visa/Mastercard transactions. As of early 2025, the total market capitalization of stablecoins stands around
$200 billion (having peaked higher), up from just a few billion in 2018. Daily transaction volumes routinely exceed tens of billions of dollars. The use cases have expanded beyond cryptocurrency trading – where stablecoins originally gained a foothold as a
safe parking asset – into mainstream payments, remittances, and even savings.
How Stablecoins Print Money (Literally)
Unlike banks, which make money through lending and transaction fees, stablecoin issuers have found a simpler—and wildly profitable—formula:
- They take in customer funds—When you buy $100 worth of USDT or USDC, the issuer holds that $100 in reserve.
- They invest it in U.S. Treasuries—Instead of letting that money sit idle, stablecoin issuers invest it in short-term U.S. government bonds, which currently yield about 5%.
- They pocket the interest—Users don’t earn any of that yield; the issuer keeps it.
- Naturally, they also take some transaction fees too, but largely nominal amounts.
For perspective, Tether held over $113 billion in U.S. Treasuries in 2024, earning about $1 billion per quarter in interest. That adds up to $13 billion in profit in a single year—more than Goldman Sachs, and with just a fraction of the
employees. Stablecoins handle massive transaction volumes with negligible incremental cost. Once the infrastructure is in place, moving an extra $1 million of USDC costs Circle almost nothing – no branch visit, no manual processing, just blockchain transaction
fees usually paid by the user. In some instances, issuers often don’t even run their own blockchains (they use existing ones like Ethereum, Tron, Solana), so the network maintenance cost is outsourced to those decentralized networks. Effectively, they collect
fees in a highly scalable model. In essence, stablecoin companies have hit on a remarkably profitable formula: take in dollar deposits, park them in safe investments yielding interest, issue digital tokens that users transact at their own cost, and keep overhead
very low.
By comparison, banks must lend money at risk, keep capital buffers, and deal with high operational costs. Visa and Mastercard, despite 50%+ net margins, still require extensive fraud monitoring, compliance teams, and a cut of every transaction to stay profitable.
Stablecoin issuers? They run ultra-lean, with minimal overhead and no loan defaults.
How Stablecoins Are Eating into Traditional Finance
Stablecoins don’t just threaten the way we conduct financial servies in theory—it’s already happening.
- Cheaper transactions: Visa and Mastercard charge merchants 2–3% per transaction; stablecoins settle payments for fractions of a cent.
- Global remittances: Moving money via stablecoins costs far less than 8%+ fees charged by some of the bigger money transfer services.
- Cross-border payments: Stablecoins allow businesses to pay suppliers instantly, bypassing slow banking rails.
This is why even traditional financial giants are getting involved. Visa now supports USDC settlements on its network, and JPMorgan has launched its own stablecoin (JPM Coin) for institutional payments.
Africa’s Stablecoin Surge: A Payments Revolution
Stablecoins are solving a very real problem across Africa: currency instability and banking inefficiencies.
- Nigeria: After the naira devalued by 30%, stablecoin transactions surged as people sought refuge in USD-backed tokens.
- Ethiopia: When the birr lost value in 2023, stablecoin use jumped 180% YoY.
- Remittances: With 70% of African countries facing forex shortages, businesses are using stablecoins to pay international suppliers instantly, according to a Chainalysis report.
Even within South Africa, where the financial system is more developed, stablecoins are gaining traction for international transactions, trade finance, and hedging against rand volatility.
Governments are taking notice. Nigeria recently launched cNGN, the first regulated naira-backed stablecoin, signaling that stable-value digital currencies are here to stay. Beyond just holding stablecoins, Africans are using them in day-to-day commerce and
business. Traders import goods by paying with stablecoins. Freelancers in Africa request payment in stablecoins to avoid banking delays and conversion losses. In Ghana, where accessing U.S. dollars can be difficult, some businesses settle cross-border invoices
with stablecoins to speed up transactions. A Chainalysis study noted stablecoins now make up 43% of Sub-Saharan Africa’s crypto transaction value, reflecting how integral they have become to the region’s crypto economy.
Can This Model Last Forever?
Of course, with great profits come great regulatory scrutiny. In terms of adoption, sensible regulation is largely positive. Clear legal status for stablecoins will encourage more businesses and financial institutions to use them. For instance, if South
African regulators explicitly allow stablecoins for cross-border trade (with proper reporting), more companies will adopt them for efficiency. Regulatory approval can also enable partnerships between stablecoin issuers and banks/fintechs, integrating stablecoins
into everyday financial apps. I am especially a fan of regulatory access to the system to inform real time regulatory reporting without the high costs we typically see now. Conversely, overly harsh restrictions (like an outright ban on using foreign stablecoins)
could stifle adoption or push it into unofficial channels. Users might then face more risk or costs to access stablecoins.
In Africa, regulators are increasingly aware that crypto is here to stay and are working together to share best practices. here is a call for regulatory certainty across the continent to prevent regulatory arbitrage and to ensure consumer protection. The competitive
landscape now includes not just crypto companies vs banks, but also public (CBDC) vs private (stablecoin) digital currencies. Traditional banks, for their part, are not standing still: many are exploring how to integrate blockchain or even launch their own
stablecoins (for example, JPMorgan’s JPM Coin, although used internally, shows banks see value in tokenized money). Visa and Mastercard themselves are partnering with stablecoin companies to stay relevant – both have announced initiatives to help settle payments
using stablecoins on their networks.
Final Thoughts
Stablecoins aren’t just some niche crypto experiment anymore. They’re handling more transactions than Visa and Mastercard, disrupting banking models, and making Wall Street-level profits with Silicon Valley-style efficiency.
The race is on: stablecoins have proven why they’re profitable and popular; now banks, Visa, and Mastercard must adapt, and regulators must ensure that this new equilibrium of finance maximizes benefits for consumers while safeguarding stability. The next few
years will reveal whether stablecoin companies can sustain their advantage in profitability and reach, or whether convergence with traditional finance models brings them back to the pack.
The industry here to stay. Gone are the days where the industry was treated as the unliked cousin in the family. Failure to act will have companies scrambling to catch up in an industry that waits for no one!
